July was a tough month for travelers as U.S. airlines lost some of their recent gains in on-time performance and lost or mishandled baggage, according to the Department of Transportation’s (DOT) most recent Air Travel Consumer Report.

Although all 15 airlines tracked by DOT lost some altitude compared to June’s monthly statistics, United Continental (NYSE:UAL) was the proverbial skunk at the garden party with more than one-third of its flights delayed and consumer complaints soaring more by nearly 50% during the month.

Collectively, U.S. airlines reported an on-time arrival rate of only 76% — down from their 77.8% performance in July 2011 and the 80.7% rate they posted in June 2012. To make matters worse, consumer complaints skyrocketed in July to 2,466 — up nearly 92% from the year earlier.

Here’s the breakdown of July 2012’s best and worst airlines as measured by performance in three areas: on-time flights, mishandled baggage and complaints:

Best On-Time Arrival Performance

Hawaiian Airlines continued to own the top spot in on-time performance in July, although it did slip significantly from June’s 93.9%. The airline easily has been able to hold onto its top ranking since 2004. Generally speaking, July’s top movers simply gained on competitors’ losses, although Alaska Airlines’ (NYSE:ALK) actually inched up from the 88.4% on-time performance it posted in June.

Worst On-Time Arrival Performance

1. United Continental — 64.1%

United Continental’s on-time performance continued to plummet to a new low of 64.1% in July — down from 70.1% in June. The largest U.S. carrier is still struggling to integrate the former Continental and has experienced monumental glitches with reservation systems. It didn’t help that UAL has a major hub at Chicago’s notoriously congested and delay-prone O’Hare International. Still, 3.6% of the carrier’s flights were delayed 70% of the time in July, compared to an industry rate of 1.2%.

How Other Major Airlines Stack Up:JetBlue (NASDAQ:JBLU) — 75.5%
American Airlines — 76.4%

Fewest Mishandled Bags:

1. Virgin America — 0.97 reports per 1,000 passengers

In its five months as a part of the consumer survey, Virgin America continues to impress, although its mishandled bag rate inched up slightly from the 0.85 it reported in June. At less than one mishandled bag per 1,000 passengers, its rate blows away the industry average of 3.52.

How Other Major Airlines Stack Up:
Delta Air Lines — 2.43 reports per 1,000 passengers.
US Airways — 2.46 reports per 1,000 passengers.

Most Mishandled Bags

1. ExpressJet — 6.84 reports per 1,000 passengers

This SkyWest subsidiary’s mishandled bag rate continued to worsen in July, reflecting the second consecutive month of deteriorating performance in the category. “Feeder carriers” like ExpressJet tend to have greater challenges managing baggage than their larger peers. The mishandled baggage rate at American Eagle, American’s feeder airline, also soared in July.

Fewest Customer Complaints

Virgin America — 5

Virgin America claimed top honors in fewest consumer complaints in July with only five. The airline is prioritizing customer service as a differentiator and has a shot at gaining an edge over legacy competitors. The airline has embraced technology — particularly social media — as a part of its overall customer engagement strategy.

Most Customer Complaints

1. United Continental — 995

Yes, UAL’s total — nearly half of the total for all 15 airlines — is correct. UAL’s July complaints eclipsed the record 585 the airline reported in June. Reservations and ticketing complaints accounted for 312 of the complaints; flight problems and customer service issues represented 274 and 126 respectively. United Continental has been snake-bit this year as it struggles to integrate its operations. Eventually, the carrier will get all the wrinkles ironed out, but don’t expect a quick fix.

Meanwhile, American Airlines’ complaints nearly doubled between June and July as the carrier worked its way through the bankruptcy process. Expect complaints to skyrocket as labor strife with pilots causes massive flight cancellations.